Risky Assets, Risque Films Are Theme Heading Into WeekendMichael P. Regan
Big weekend coming up: Valentine’s Day, Presidents’ Day, Friday the 13th.
Some big risque movie is coming out too, and (spoiler alert) from the title it sounds like it must be a documentary about the hair colors in Berkshire Hathaway Inc.’s board room.
Anyway, it seems like a good time to clear out the inbox of any interesting research lying around. So here goes:
*Credit Suisse Group says its momentum indicators for risky assets “look to be on the cusp of giving what may be important ‘buy’ signals.” Which assets are the risky ones, of course, is in the eye of the beholder. If you’re Comcast Corp., owner of NBC, it’s Brian Williams. If you’re the producer of a music-awards show, it’s Kanye West. For the rest of us, it’s usually stocks and, these days, oil and the bonds of broke nations.
*That leads us to the stock market’s riskiest of assets of late, which are energy shares. Robert W. Baird & Co. is the latest to weigh in on oil stocks, saying it’s still too early to get too aggressive. If you can’t resist, Baird’s strategists like the integrated oil and gas stocks more than the drillers. They single out Exxon Mobil Corp., Chevron Corp. and Valero Energy Corp. And it’s too early to load up on the master limited partnerships in industry, according to Wells Fargo’s Mark Litzerman, because “there are simply too many unknown variables.”
*Birinyi Associates Inc. reveals the “Street’s Favorite Stocks” by looking for the companies with the biggest expected gains based on analyst targets compiled by Bloomberg. The top five are...drum roll please...: Freeport-McMoran Inc., Nabors Industries Ltd., Range Resources Corp., EQT Corp. and GameStop Corp., each with target prices more than 45 percent above their current share price.
*Bloomberg’s own Kevin Kelly crafted an interesting equity screen to identify undervalued stocks that analysts love. He searched for PEG ratios, which divide a company’s price-to-earnings ratio by its projected rate of profit growth, that were less than one. Among the 17 S&P 500 stocks he found, the ones with the best potential for gains based on the average price targets are Delta Air Lines Inc., Micron Technology Inc., Southwest Airlines Co. and GameStop.
*Not to be outdone, Kelly’s colleague Yuliya Staggs screened for Internet media companies whose target prices are also way above their current share prices. Topping that list: Qihoo 360 Technology Co., Weibo Corp., Sina Corp., Pandora Media Inc. and Yelp Inc., each with share-price estimates at least 40 percent above where they’re currently trading.
And even Brian Williams got into the act, running a screen that shows it’s time to go long companies that make tanning beds and Vitalis. (OK fine, that last one is made up.)